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All About Short Sales

At Robert Maes and Associates we are experienced Short Sale Real Estate Agents.  Our team has facilitated several short sales, in ALL price ranges, throughout San Diego County.    A short sale is a way for a financially distressed seller to sell their home instead of letting the home go to foreclosure.
 

What is a short sale?

A short sale is when you sell your home for LESS than the amount of your mortgage.   For example:  You owe $535,000 on your home, but your home’s current value is just $450,000.   A short sale is an agreement in which the mortgage lenders or other lien holders agree to accept a payoff on the loan for less than the current balance. Many lenders agree to a short sale because they receive more of the loan balance in comparison to the amount from selling the home under foreclosure.

Who qualifies for a short sale?

Although the answer to this question varies from person to person, sale to sale, in general, if you have any type of financial hardship, and owe more than what your home is worth, you will qualify for a short sale.  

Why do a short sale VS letting your home go into foreclosure?

 The short sale process also aids in maintaining homes values in the community and helps the seller maintain better credit compared to foreclosure. In most instances, homeowners considering a short sale must meet specific criteria to qualify.

 A short sale is not a typical real estate transaction, homeowners should consult a tax expert, obtain advice from an attorney and hire a qualified and experienced Prudential California Realty Realtor®. An experienced Prudential California Realty Realtor® can help guide you through the process and act as a liaison between all the parties involved. 

The Short Sale Process From A Buyers Point Of View
 
For the homebuyer the short sale process can be very confusing and feel like it is never ending.  There is not a fixed way that local Realtors and local/national banks handle each short sale transaction.  As mentioned above the seller needs to have a financial hardship and a short sale package needs to be given to their lender/mortgage holder.   Once a buyer places an offer on a short sale home that offer is submitted along with an estimated closing statement to the bank.   The bank then assigns a negotiator, orders a BPO (brokers price opinion), which is similar to an appraisal, and makes a decision to either accept the offer, or counter back at a higher price.   This process can take as short as just a few weeks, but typically will take several months.  Typically the listing agent and seller will accept several offers, submitting the highest offer to the bank for approval and keeping the additional buyers on hold in a backup position.   Because the entire process can take a long time many buyers will have offers on several properties all at the same time.  It is actually beneficial to both buyer and seller to have multiple offers!  From a sellers point of view having more than buyer means that if the first buyer walks away during the short sale process they already have someone waiting in the wings!  Having an offer on several properties sounds crazy to many buyers, but in reality it broadens the buyers scope of homebuying potential.  
 
As an example:  here at Robert Maes and Associates we recently had a short sale listing for sale where we had 4 offers on the property.  The bank took a very long time to go through their approval process and by the time we received the first counter offer buyers number one and number two had already moved on to other properties.  We actually closed escrow with buyer number four! 
 
Another example:  We recently represented a buyer who was the number six offer on a home.  This buyer had offers on over ten short sales at the time.  Once his offer was accepted on this particular property he moved forward and closed escrow!  We then let the other agents and sellers know that he was withdrawing his offer on the other homes.